Gold increased for a time to a weekly high of over $1,190 per troy ounce on the back of a weaker US dollar, though it is currently trading below this level again. The debt crisis in Greece also appears to be lending support to the gold price. Nothing new came out of another meeting between the Greek Prime Minister Tsipras, the French President Hollande and German Chancellor Merkel.
Tsipras will be meeting with European Commission President Juncker today. According to Greek officials, the highly-indebted country is hoping for the aid programme to be extended by nine months. Without financial aid, it will be virtually impossible to prevent national bankruptcy in Greece, says Commerzbank.
The rating agency S&P further lowered the country's creditworthiness rating overnight. Yesterday holdings reduced by a further 1.9 tons, primarily in the SPDR Gold Trust, which is the world's largest gold ETF. Its holdings have meanwhile fallen to their lowest level since September 2008 - the month in which US investment bank Lehman Brothers went bankrupt. In other words, all the holdings that had been built up since then have now been withdrawn again. For as long as ETF outflows continue, the gold price is unlikely to make any significant gains, states Commerzbank.
